CP Kelco raises prices for all ingredients

11-Jul-2010 - Last updated on 12-Jul-2010 at 15:33 GMT

CP Kelco is raising prices for its entire ingredient portfolio by up to 10 percent, a move the company says is necessary due to the higher marketplace demand putting a squeeze on supplies.

The firm announced it will raise prices across all product lines as of August 1, 2010 or as contracts allow. Some of the major products to be affected include carboxymethyl cellulose (CMC), pectin, xanthan gum and carrageenan, as well as select specialty biopolymers.

“Increases in global demand have affected the supply of critical raw materials such as fruit peel and cellulose, while other raw materials have experienced steep cost increases throughout the first half of 2010,” said E. Charles Bowman, VP of marketing for CP Kelco.

Jane Schulenburg, the firm’s marketing director, told FoodNavigator-USA.com that raw material supplies are being squeezed by a higher market demand for the ingredients.

“There’s more demand for the end products from our customers, so there’s more pressure on supply. We always have cost reduction initiatives in our facilities, but this goes beyond anything we can contain, and we must find a way to accommodate some of the extra cost,” said Schulenburg.

Increased capacity

CP Kelco said it is investing in additional capacity in order to meet global increases in demand for its ingredients.

Earlier this month, the firm announced an $8m investment in a pectin plant inSkensved, Denmark, which is designed to meet growing demand for its amidated pectin for use in low-sugar and sugar-free products.

Klaus Bjerrum, category director for pectin & carrageenan, told FoodNavigator.com at the time that there has been a general pick up in pectin demand and the GENU LMA pectin product was identified as the one with particularly good growth in demand, and the most urgent need for investment. The expansion is due to be completed in June 2011.

CP Kelco has two other pectin plants, one in Germany which was expanded in 2000, and one in Brazil, which has been the subject of several upgrades since 1999, the last of which was in 2006.

The firm also has a new CMC and pectin manufacturing facility in China, which is only just going on line. According to Schulenburg, the facility has a 15,000 ton capacity.